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1.4 The price producers will receive for deodorant will be 1.5 Professor A advocates a full per ounce subsidy to consumers, reducing their price to

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1.4 The price producers will receive for deodorant will be 1.5 Professor A advocates a full per ounce subsidy to consumers, reducing their price to zero, on the grounds that the increase in externality benefits more than outweighs the distortion in the private deodorant market. Professor B, reacting to Professor A's plan, holds that society, on efficiency grounds, is better off with the market outcome {no government intervention) than with the results of Professor A's policy. On paper, draw a graph to show quantity consumed and prices to producers and consumers under each professor's plan. You will hand this graph in to your section leader, on the problem set due date, in section, for grading. If Professor A's policy is adopted, the price consumers pay for deodorant will be per ounce. per ounce

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